First, so far, only securitization and real estate lawyers have been laid off. Late this year, after firms finish recruiting 2nd year law students for the law firm's summer programs, the firms will probably lay off a lot of M&A and corporate finance associates. At the same time, they'll keep recruiting students to have a pipeline of junior people entering mostly into litigation and bankruptcy, and much, much less so into M&A / corp fin groups.

Second, in a real downturn in M&A / corp fin, the law firms cut M&A really deep. I can think of places that cut 75% of associates doing M&A in the early 1990's.

Third, there appears to be a bubble in hiring of entry-level associates by big law firms. In 1991, about 6% of entry level associates got the median salary at big firms. In 2000, the peak of the dot com bubble, that jumped to 14%. And by 2006, that jumped to 17%. You can see this on NALP's website: http://www.nalp.org/content/index.php?pid=561. If the debt bubble shrinks, the percentage of law students hired by big firms could revert back to where it was in the early 90's before when there were a lot less deals and a lot fewer lawyers needed to staff them.

Fourth, there's also a bubble in law school tuition. Around 40 or 44% of law students get jobs paying 40k to 60k. However, their law schools (even the public ones) all charge the same tuition as the ivy league. At some point, a rational student will decide law school is ridiculously over-priced. (Law school tuition is high because colleges own law schools and over-charge graduate students in professional schools in order to subsidize tuition for undergraduates, and colleges get away with this by marketing law school as a ticket to a big firm salary even though few law students outside the top tier law schools get jobs at them.) Eventually, college kids will get smart and decide the return on investment for tuition at many law schools just isn't worth it (absent a free ride on some grant or whatever), and a lot of law schools will fold and be forced to lower tuition. It won't be as bad as way back in Andrew Jackson's day when the populists eliminated any requirement for people to attend law school in order to practice law, and law schools developed the socratic method as a way to have each professor teach as many students as possible and thereby reduce costs, but it will be a tough time for law schools.

After two years in the Marines, 1965-67, I got out of the US and moved to Canada. The Vietnam era and books like a BRIGHT SHINING LIE and THE BEST AND THE BRIGHTEST opened my eyes to the real US. Unfortunately, for US Citizens many of the bad characters and institutions described in those books have expanded their operations in the US and criminalized many parts of the economy.

Of course here in Canada we have Branch Plants of the US Madness, here known as the Conservative Party of Canada. But, to date at least, Canadians have shown the good sense not to completely swallow the Snake Oil. One very bad aspect of the Canadian system is that with 35-40% of the popular vote a government can many times get a majority of the seats in the Parliament and that allows it almost complete power there being no opposing Executive branch.

In any case, any young person in the US, should seriously consider getting out of DODGE.

Before The Large Hadron Collider there were few children playing with cerberus-like entities, e.g, multi-headed dogs which guard the gates of Wallstreet. Is this all just another coincidence in a tsunami of cascading coincidences, or has the world gone bloody mad?

Someday, I hope these creatures will become pet food instead of whatever the hell they are now.